‘What does the world need?’ It’s one of the most pressing questions of our time. This question encompasses a number of other important questions: Why are we here? For what reason do we exist? What values create the foundation of what matters most? What kind of world are we trying to create? What value is our work bringing? What are we paying our CEOs for? Does that make sense? This article is not really a new theory. Rather, it is more a rediscovery and synthesis of what is hidden in plain sight.
The current life expectancy for a Fortune-500 company is less than 35 years, less than 10 years for a start-up, and about 12.5 years for all companies together. During this lifespan, the tendency is to focus on short-term profits with little or no concern for the impact the organisation has on society or the environment. We are witnessing an unprecedented political polarisation and economic disruption around the world today. The status quo is clearly no longer working. Humanity is now beginning to understand how dysfunctional the management of nations, people, and resources has been. Human needs and the needs of our environment are far too complex to be managed by political means, arbitrary economic direction, or an elite with questionable values and without the relevant understanding of science and technology. The fierce pressure of competitive markets in a deregulated world, often means economic brawn increasingly trumps humanity.
CEOs are delivering short-term value at the expense of the organisation’s long-term viability. And most executives aren’t even delivering short-term value – they are more focused on meeting KPIs to maximise their next bonus. The pandemic brought us to an incredible moment of transformation at great speed. A tragedy can turn out to be for our greatest good if we approach it from ways in which we can grow. In this way, we have been presented with extraordinary space to reimagine what a better future might look like for us all. Today’s leaders are facing an unprecedented level and pace of change, with many of the business challenges we face being quite different in their systemic nature from those before this time. As hot-off-the-press leadership research indicates, our traditional methods and modes of organisational learning and our leadership development are completely inadequate for the business environment we now face. A new way of learning, adapting, and evolving is now demanded by our business context.
“Before it is too late, we should embark in earnest on the most fundamental existential (and also truly revolutionary) task facing modern civilisation, that of making any future growth compatible with the long-term preservation of the only biosphere we have.”
— Vaclav Smil
Complex Living Systems
The dominant economic model of the world is unsustainable. The consequences of that unsustainability are unacceptable and raise monumental ethical questions that society can no longer avoid. In fact, Capitalism – as we know it – is now in question. This is not the time to shrink back in fear. Rather, we find ourselves in an extraordinary moment of opportunity. Business can be a force for good. Let’s recreate our world with human and planetary values in all that we create. If we are to build a future worth living in, we must achieve equilibrium between our economy, our ecology, and our community. It’s time to reimagine the very purpose of business and the role it plays in regenerating our economy, our environment, and our civilisation. This is what our world needs from business. This is what business needs to deliver for our world.
As we face increasing systemic challenges, fast-shifting consumer patterns, complex supply chains, and inter-connected wicked problems, we find the 20th century ‘organisation-as-machine’ is giving way to the 21st century ‘organisation-as-living-system’. With it comes a profound shift in how we lead, relate, partner-up and perform. There is much we can learn from the living systems of nature and its 3.8billon yrs of R&D.
“It’s only gotten to the point where it’s easier for us to imagine the destruction of the world than the changing of our economic system”
―
New Playbook for Redesign
Not all companies have the guts to start from scratch. Compounding our problems is the simple fact that nature operates as a closed-loop system, but we do not. We extract resources without replenishing them, accumulate waste materials without recycling them, and we pollute our air, water, and food crops for the desire to maintain competitive profit margins. There are many other factors converging at once besides the pandemic – all of which contribute to the system’s unrest. The world of business is in (re)evolution. The single pursuit of ‘profit at any cost’ has been replaced by a desire to build companies that create a better future and enjoy commercial success.
While any living system is always subject to change, it is when a system swings far from its normal state that its real livingness is tested. In the last eighteen months, our global living system has changed dramatically. Entire regions of the world have been in lock down, and even where people have been allowed on the streets, they have had to wear masks. From a face-to-face culture, we have largely been forced into a virtual culture where many have had to come face-to-face with their own isolation. Organisations the world over have had to rapidly change their day-to-day operating principles on multiple fronts.
“A flower does not use words to announce its arrival to the world; it just blooms.”
―
Our Inner Transformation
In such a far-from-equilibrium state, it is normal for systems to bifurcate. That is, part of the system may develop along one possible path, while another part develops along another. This is true on multiple levels — at the level of markets, of countries, of organisations, and of people. In such a bifurcation, a system can unwittingly tread a path of entropy, ending in general debilitation. Or it may take one of creativity, ending in greater prosperity. The defining dynamic, to ensure a positive path, takes a rare quality in the corporate world – the quality of humility.
When we take the time to explore the impact of small patterns on bigger realities, we can see that simple attitudes, such as humility, sincerity, and diligence can significantly impact organisations and markets. In an organisation where humility is valued, there will be tangibly a much more welcoming atmosphere. Team members will display humility in the way they listen, the way they treat others, and their willingness to add to active trajectories of work based on even unusual ideas to do with the creation of long-term value in the company.
“Humility comes through awareness of the depths of yourself.”
―
The Foundation of All Virtue
Humility is powerful in dealing with high levels of ambiguity because it allows you to draw something larger from the field of possibility. It signals to the field (or system) – “I am here, ready to hear, ready to receive, and ready to act without my filters and preconceived notions.” This approach can have a profound effect on how things evolve. The more humility moves beyond a dynamic of lip service, the better. A simple yet powerful approach to increasing humility is encapsulated well in James Cameron’s movie Avatar by the greeting, “I see you.” This is the act of seeing someone, without your own filters, and therefore more deeply. This can only be done from a state of humility and this approach allows you to more easily receive who another person is – not what you want them to be.
This kind of humility fuels authenticity. By simply creating a space where another can be received, we allow who the other person is to begin to shine! Our shields more easily drop, which puts into effect a virtuous cycle where authenticity continually reinforces a work environment where even more humility and authenticity can come forward. It is this authenticity that is a key driver in creating long-term resilience. It is in this way that livingness can grow, and the bifurcated path of creativity – fueled by authenticity – becomes more secure. Multiply this possibility across an organisation’s entire workforce and you may be surprised by the innovation and happiness that emerges. All it really takes is an actively practiced centre of humility. Yet, without it, you will be unable to open your mind to the following concepts.
“On the highest throne in the world, we still sit only on our own bottom.”
―
Unified Science
Scientists are turning the rules by which living systems sustain and regenerate themselves into empirical principles of systemic health and development. These principles apply as much to nonliving systems, including economies, as they do to ecosystems and living organisms. The result is an unexpected alignment of insights from fields ranging from physics and biology to sociology and even the core spiritual beliefs common to all the world’s great wisdom traditions. The message is clear: We can — and must — bring our economic theory and practice into alignment with our latest understanding of how the universe and humanity actually works!
Global threats from pandemics to climate change and rising inequality, have led an increasing number of thought leaders and policymakers to question the long-term viability of today’s dominant form of capitalism. At the same time, a multitude of innovators and entrepreneurs around the world are experimenting with practical ways to reimagine our economic system so that it works for all levels of society, as well as for the planet. Our common goal is to create a self-organising, self-maintaining, adaptive regenerative form of capitalism to produce lasting social and economic vitality for global civilization as a whole.
“Creativity tempered by sound judgment is the currency of the new economy.
It remains largely an open playing field for anyone who wants to relearn on a daily basis
everything they thought they knew.”
―
Systems Within Systems
“Regenerative Capitalism” is an economic system that acknowledges that the market we have now is not a beautifully self-correcting free market, but a market that is manipulated by the most powerful forces. And it is a capitalism that states that just as the goods and services we take from each other are not free, the value we extract from nature (water, land, fossil fuels and so on) comes with a cost. Structure influences behaviour. If the definition of insanity is to continue doing the same actions and expecting different results, then it must be true that if we want different behaviours, then we need a different structure.
“The universal patterns and principles the cosmos uses to build stable, healthy, and sustainable systems throughout the real world can and must be used as a model for economic-system design.”
— John Fullerton
8 Key Principles of Regenerative Capitalism
We are currently operating the world on a bankrupt theoretical construct, which is why it feels so out of control. Natural systems thrive because they are regenerative. Our body regenerates every single cell every seven years. In this way, sustainability is the inherent outcome, not the design principle. If the global economy and its institutions, and civilisation itself, are to thrive in the long run, they must operate regeneratively.
1. In Right Relationship
Humanity is an integral part of an interconnected web of life in which there is no real separation between “us” and “it” because it is all one system. An understanding of fractals teaches us that all levels within the system must live in right relationship. Damage to any part of that web ripples back to harm every other part as well. The most important aspect of “right relationship” is synergetic collaboration, which means collaboration, not competition, is the defining quality in both business and life. Regenerative economies are built on nested, fractal relationships across many levels, ranging from individual human beings, their families, and communities to their regions, countries, global civilisation, and the biosphere as a whole. Life is a team sport.
2. Views Wealth Holistically
True wealth is not just money in the bank. True wealth is holistic and must be defined and managed in terms of the wellbeing of the whole. We achieve this wellbeing by harmonising multiple kinds of wealth, including: social, cultural, living, and experiential. Corporate accounting and finance seek to condense all value into immediate monetary terms (present value) in order to drive decision-making. Qualitative factors such as balance, beauty, or stress – that do not lend themselves to monetisation – fall outside the language of accounting. This was done intentionally to keep accounting simple, perhaps without consideration of the unintended consequences to our value system (what gets measured gets valued).
3. Innovative, Adaptive, Responsive
In a rapidly changing world, the best path to “fitness” is to be innovative, adaptable, and responsive to events and conditions by continually learning. The transition to regenerative economies will depend on our innate, entrepreneurial human capacity to innovate and to co-create across all sectors of society. Huge command and control global business enterprises are transformed or replaced by more innovative, agile networks of interconnected business webs. Value is created through enhanced relationship-centric exchange, adapting and responding to the needs of the whole system.
4. Empowered Participation
In an interdependent system, fitness comes from contributing in some way to the health of the whole. Everyone matters and the health of any human economy is dependent upon everyone’s unique contribution to the health of the whole. Human beings are treated not merely as substitutable units of labour, but are valued for the unique contributions their creativity and entrepreneurial energies make to the enterprise and to the society at large. Continuous investment in talent to ignite this creative human potential and catalyse collaborative learning is a commonsense priority.
5. Honours Community and Place
Each community consists of a mosaic of people, traditions, beliefs, and institutions uniquely shaped by long-term pressures of geography, human history, culture, local environment, and changing human needs. By honouring this fact, a Regenerative Economy nurtures healthy and resilient communities and regions that are uniquely informed by the essence of their individual history and place. This diversity creates the richness that is essential to system vitality. It fills niches, provides choices, adds opportunities, discovers new ways, and increases excellence through constructive competition.
6. Edge Effect Abundance
Creativity and abundance flourish synergistically at the “edges” of systems, where the bonds holding the dominant pattern in place are weakest. For example, there is an abundance of interdependent life in salt marshes where a river meets the ocean. At those edges, the opportunities for innovation and cross-fertilisation are the greatest. Working collaboratively across edges – with ongoing learning and development sourced from the diversity that exists there – is transformative for both the communities where the exchanges are happening and for all the individuals involved.
7. Robust Circulatory Flow
Just as human health depends on the robust circulation of oxygen, nutrients, etc. economic health also depends on robust circulatory flows of money, information, resources, goods and services to support exchange, flush toxins, and nourish every cell at every level of our human networks. The circulation of money, information and the efficient use and reuse of materials are particularly critical to individuals, businesses, and economies reaching their regenerative potential.
8. Seeks Balance
Being in balance is more than just a nice way to be; it is essential to systemic health. Like a unicycle rider, regenerative systems are always engaged in this delicate dance in search of balance. Achieving it requires that they harmonise multiple variables instead of optimising single ones. A Regenerative Economy seeks to balance: efficiency and wellbeing; collaboration and competition; diversity and coherence; and small, medium, and large organisations and needs.
“Capitalism does millions of things better than the alternatives. However, it is totally ill-equipped to deal with a small handful of issues. Unfortunately, they are the issues that are absolutely central to our long-term wellbeing and even survival.”
—Jeremy Grantham
6 Regenerative Movements in Action
The need for regenerative reforms is particularly critical in politics and public policy. The long-term cost of economic crises is measured not only in financial losses, but in ruined lives, foreclosed homes, devastated communities, slashed public services, and a generation of youth suffering from alarming levels of hopelessness and anxiety. This has only been exacerbated by the pandemic. Firefighting the financial system has also distracted the public and private sectors from the need to prepare for the economic transition that will inevitably be forced upon us by Mother Nature if we do not initiate systemic change on our own. Here are some great examples of initiatives happening now to facilitate transformational economic system change:
Purpose-Driven Business as a Force for Good
“B Corps” (in contrast to conventional C Corps) demonstrate “business as a force for good.” They sign up for a set of best practices including a corporate charter declaring that directors “shall give due consideration” to all stakeholders, not just shareholders. Eg: Patagonia, Ben & Jerry’s and Etsy.
Micro Enterprises and Micro Finance
Nobel Laureate Muhammad Yunus and his Grameen Bank of Bangladesh pioneered the concept of micro-finance organisations. They make small loans to micro-businesses and poor people to help them to achieve self-sufficiency. Grameen’s extremely effective strategy of organising groups of borrowers and teaching them both business and technical skills caused it to grow from fewer than 15,000 borrowers in 1980 to 9.4 million today – 97 percent of whom are women.
Relocalisation. Slow Food, Slow Money
Relocalisation organisations strive to build more resilient societies by relocalising the provisioning of food and energy, as well as currency, governance, and culture. Their immediate goals are to strengthen local economies.
Slow Food, a variation on Relocalisation, works to promote local foods and preserve centuries-old traditions of food preparation and production, while opposing fast food, industrial food production, and globalisation. Slow Food’s motto is: “good, clean, and fair.” Started in 1986 to prevent McDonald’s from setting up a franchise at the bottom of the Spanish Steps in Rome, the Slow Food movement has expanded to over 100,000 members in 150 countries.
Slow Money, inspired in part by the Slow Food movement, catalyses investment to local food enterprises and organic farms, connecting investors to the places where they live and “bring money back down to earth.” Since its founding in 2010, $79 million has been invested in over 806 small food enterprises.
Impact Investing
Investments are consciously made into organisations, projects or funds with the intention of generating measurable social and environmental outcomes, alongside a financial return. This is often seen in sectors as diverse as aged care, renewable energy, and also in the arts.
Global Alliance for Banking on Values
(GABV) is a network of banking leaders from around the world committed to advancing positive change in the banking sector. Their collective goal is to change the banking system so that it is more transparent, supports economic, social, and environmental sustainability, and is composed of a diverse range of banking institutions serving the real economy.
Wellbeing Economy Alliance
(WEAll) is the leading global collaboration of organisations, alliances, movements, and individuals working together to transform the economic system into one that delivers social justice on a healthy planet. WEAll achieves this strategy by three approaches:
- Creating New Power Bases
Building a Wellbeing Economy requires redesigning institutions, infrastructure, and laws to promote a boost in activities that support the wellbeing of people and planet, and demote those that undermine it. A major barrier to Wellbeing Economic policymaking is the concentration of political and financial power. WEAll aims to catalyse enough people to force governments to act to address this power imbalance. They do this by creating spaces to convene and connect stakeholders from different focus areas and geographies to work together and build a base of power that will forcibly change the system.
- Knowledge & Policy Evidence While much is already known about how a Wellbeing Economy might work and how to get there, this information is scattered across different types of knowledge and sectors. WEAll works to synthesise and disseminate the existing knowledge and evidence in a more coherent, solutions-oriented, and accessible format. This is urgently needed to help humanity understand and feel that a Wellbeing Economy is indeed achievable.
Sharing New Positive and Empowering Narratives
New Wellbeing Economy narratives, which succinctly summarise the societal vision towards which policies work, make the concept of a new economic system accessible to all, and help galvanise widespread support of the policies required to make this new economic system a reality. The ultimate goal is to help people understand that a Wellbeing Economy is simply common sense.
“Until you consciously employ the brain it will go to sleep on you. You must feed it, challenge it and use it. That is the way to get it fully engaged in life.”
―
A New Paradigm
We have all been raised to think more is better, and everything we do economically is measured in comparison with what came before. Just as money in your bank account doesn’t buy happiness, GDP growth also does not buy the community happiness. The growth-at-any-cost focus has put unsustainable pressures on our ecosystem. It is time to return to nature, away from the greed and pride that brought us to this point. There are so many amazing minds and creative problem solvers on this planet, and humanity has the numbers. Regenerative economies are the natural next step in economic evolution, bringing economics into alignment with our latest scientific understanding of how the universe actually works. We already see expressions of regenerative efforts emerging all around us, although they are often invisible to those observers still trapped in the outdated reductionist paradigm.
This new narrative illuminates a pathway to transcend our broken national and global politics and get to the urgent work at hand. We have a choice whether to embark down this path. Our long-term prosperity and our very survival both depend on nothing less than a once-in-the-history-of-civilisation transformation to a regenerative society based on a holistic worldview. Working with enlightened entrepreneurs on real-world projects and discovering a solid empirical foundation for a new theory of regenerative economics has made us here at Pure Element 5 confident in the dream of a regenerative civilisation. While the path is now clear, the work is just beginning.
What an incredible time it is to be alive!
“Every single cell in the human body replaces itself over a period of seven years. That means there’s not even the smallest part of you now that was part of you seven years ago.”
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